(2)
The net operating benefits of Statute X exceed the net operating benefits
of Statute 0 by more than the net value of the changeover costs minus the
changeover benefits.
In plain language, society gains by moving from Statute 0 to Statute X because
the gains in making the change exceed the net transaction costs. This, as will
be explained later, is the net benefit rule that underlies the reasoning process
for policy, which is used for making and interpreting law.
Rules
A legislature does not simply choose a statute. A statute is composed of rules,
so enacting a statute entails enacting as one package all the rules contained
within the statute. To illustrate this, if Statute X is the statute in question, the
rules that it contains are Rules X.1-X.n. This can illustrated by the following
table:
Statute X
Rule X.1
Rule X.2
Rule X.n
Figure 6.2 Rules
Content of Rules
Introduction
A statute, as we have seen, is composed of rules so that Statute X contains
Rules X.1-X.n. Each rule, however, is composed of elements and
consequences. Hence, the fundamental option before a legislature about to
make a statute on a subject is not one statute compared to others, or the rules
in one statute compared to others, but a choice as to the elements and
consequences that will constitute the rules within the statute.
Elements
In one sense the choice for a legislature is simple – within constitutional limits
it can just exercises its power and makes the statute as it pleases. It can
choose any elements at all, so that there are numerous possible differences
between any two versions of a statute. However, in practice the options may
be constrained by considerations of ideology, public opinion and political
advantage.
Each element is a generalisation of a fact.
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Facts
that constitute elements in
this way define the catchment area for the statute, consisting of the conduct
and the parties that the proposed law will regulate. What these facts are will
obviously vary from rule to rule. For example, the law of wrongs defines
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Chapter 3 Organising Law
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